Only if the exchange rate is wrong. If he gets the exchange rate correct (difficult to do in a centralized manner) then I think it should not get expensive. He would be able to sell one for dollars or other currency and then buy the other. He may get a lot of volume. But without actually creating such an exchange, there really is no way to know.

In a way, sites like coinabul are an over-the-counter gold/bitcoin exchange. I don't think a gold/bitcoin exchange similar to Mt.Gox currently exists, but I think it would be a good idea to eventually have them in addition to the OTC variety exchanges. Precious metals and bitcoin complement each other quite well, in that all are very difficult to counterfit.

Without destroying what it is that makes bitcoin work, exchanges between gold and bitcoin are the only way to link the two currencies.

Only if the exchange rate is wrong. If he gets the exchange rate correct (difficult to do in a centralized manner) then I think it should not get expensive. He would be able to sell one for dollars or other currency and then buy the other. He may get a lot of volume. But without actually creating such an exchange, there really is no way to know.

In a way, sites like coinabul are an over-the-counter gold/bitcoin exchange. I don't think a gold/bitcoin exchange similar to Mt.Gox currently exists, but I think it would be a good idea to eventually have them in addition to the OTC variety exchanges. Precious metals and bitcoin complement each other quite well, in that all are very difficult to counterfit.

Without destroying what it is that makes bitcoin work, exchanges between gold and bitcoin are the only way to link the two currencies.

The big problem though is that the "correct" exchange rate is not a constant, it varies.

Only if the exchange rate is wrong. If he gets the exchange rate correct (difficult to do in a centralized manner) then I think it should not get expensive. He would be able to sell one for dollars or other currency and then buy the other. He may get a lot of volume. But without actually creating such an exchange, there really is no way to know.

In a way, sites like coinabul are an over-the-counter gold/bitcoin exchange. I don't think a gold/bitcoin exchange similar to Mt.Gox currently exists, but I think it would be a good idea to eventually have them in addition to the OTC variety exchanges. Precious metals and bitcoin complement each other quite well, in that all are very difficult to counterfit.

Without destroying what it is that makes bitcoin work, exchanges between gold and bitcoin are the only way to link the two currencies.

The big problem though is that the "correct" exchange rate is not a constant, it varies.

Very true. Because the rate varies constantly, it is difficult, if not impossible, to establish an exchange rate centrally. Decentralized exchange rate determination via the free market is the only long term sustainable method for determining gold/bitcoin exchange rate. And for any other exchange rate for that matter. Sure, there are other methods to determine exchange rates, and goverment fiat is one of those, but they are not sustainable over the long term.

Then he can go and make goldcoin. C'mon, go ahead, make it. Guess what? Criticizing is much easier.

Oh and please explain me how do you link something to gold in a way that do not rely on trust. Bitcoin is a trust no one system. The only way you have to trust no one with gold is by physically holding the gold bullions